Japan Closer Than Ever Before To Australian Submarine Deal

Japan may be closer to grabbing a US$34.55 billion Australian submarine fleet contract as Germany’s ThyssenKrupp Marine Systems (TKMS) is reported to lose ground over technical concerns.

Another bidder for the Australian submarine fleet competition is France.

Australia is expected to decide the winner within the next six months, ahead of a national election in which the deal and the jobs it will create is expected to be a key issue for the conservative government. The contract is to build a boat in the 4,000-ton class to replace Australia’s aging Collins-class fleet.

Japan has offered a variant of its 4,000-ton Soryu boats made by Mitsubishi Heavy Industries and Kawasaki Heavy Industries, where as France’s state-controlled naval contractor DCNS has proposed a diesel-electric version of its 5,000-ton Barracuda nuclear-powered submarine. And TKMS is proposing to scale up its 2,000-ton Type 214 class vessel.

Reuters quoted a source as saying that building submarine twice its original size presents exponential technical challenges, hence putting TKMS furthest from having the experience to offer what Australia wants in a large, long-range, stealthy submarine.

“The German proposal is an enlarged version of a smaller existing submarine, and that technically is risky,” said one source.

However, TKMS official is optimistic about the contract and has refused to acknowledge the rumors about the German firm likely to get dropped due to technical issues.

Australia wanted a partner to design and build a new submarine, which neutralizes any perceived advantage with existing bigger boats, TKMS Australia Director Jim Duncan was quoted as saying.

“The rumors could well be right. Who knows,” Duncan said when asked to respond to what the industrial sources said. “My only advice, having spent many years in this environment is: believe nothing that you hear and only half of what you see”.

Australia’s Defence Department is formulating a recommendation based on materials submitted by the bidders late last year and is expected to give that to Cabinet as early as March.